Audit 411543

Program: COVID-19 - Coronavirus Capital Projects Fund Federal Agency: U.S. Department of Treasury Assistance Listing Number: 21.029 Pass-Through Agency: Wisconsin Department of Administration Pass-Through Agency ID: FFP 24-33 Criteria: In accordance with 2 CFR §§ 200.318 and 200.327, non-Federal entities must maintain written procurement procedures that comply with the Uniform Guidance procurement standards. These procedures must include written standards of conduct governing conflicts of interest, establish procurement methods consistent with the federal procurement thresholds and require price or rate quotations from an adequate number of qualified sources for small purchases exceeding the micro-purchase threshold. Condition: The City's procurement policy does not comply with the procurement requirements of the Uniform Guidance. The policy does not include written conflict of interest standards applicable to employees, officers or agents involved in the selection, award or administration of contracts funded with federal awards. The policy establishes a $25,000 threshold for procurement procedures, which does not align with the federal procurement methods established under the Uniform Guidance. The policy does not address the federal micro-purchase threshold of $10,000 (or the applicable threshold adopted under federal regulations) or require price or rate quotations from an adequate number of qualified sources for purchases exceeding the micro-purchase threshold. The City contracted with a third-party administrator who provided the appropriate services related to procurement for this grant program. Cause: Management has not updated the City's procurement policy to incorporate the procurement standards required by the Uniform Guidance. Effect: Without procurement policies that comply with Uniform Guidance requirements, the City is at increased risk of noncompliance with federal procurement regulations. This may result in questioned costs, disallowed expenditures, repayment of federal funds, audit findings or other enforcement actions by the federal awarding agency or pass-through entity. Questioned Costs: None noted. Recommendation: We recommend the City revise and formally adopt a procurement policy that complies with 2 CFR Part 200. The policy should establish written standards of conduct that address organizational and personal conflicts of interest; update procurement thresholds to align with current federal procurement methods and thresholds; and require price or rate quotations from an adequate number of qualified sources for procurements exceeding the federal micro-purchase threshold. Views of Responsible Officials: Management agrees with the finding and will make efforts to implement a formal procurement policy.